By

N. V. MEHTAB.COM., LL.B., F.C.A.

V. G. MEHTA'STM

INININININCOCOCOCOCOMEMEMEMEME-----TTTTTAXAXAXAXAXREADY RECKONERREADY RECKONERREADY RECKONERREADY RECKONERREADY RECKONER

ASSESSMENT YEAR

20032003200320032003-----0404040404

WITH RATES TABLES AND EXAMPLES FOR

CAPITAL GAINS • WEALTH-TAX

GIFT-TAX • COMPANIES

GIST OF IMPORTANT CIRCULARS ON DIRECT TAXES

LIST OF BONUS SHARES

ASSESSMENT YEAR

2004-052004-052004-052004-052004-05FOR DEDUCTION OF TAX FROM ‘‘SALARIES’’

AND

COMPUTATION OF ‘‘ADVANCE TAX’’DURING THE FINANCIAL YEAR 2003-04

PUBLISHERS:

SHRI KUBER PUBLISHING HOUSECOURT HOUSE, DHOBI TALAO, MUMBAI 400 002. PHONE: 2201 5532

Published by Kishore V. Mehta for Shri Kuber Publishing House, Court House, Dhobi Talao, Mumbai-400 002.Printed by Arun K. Mehta at Vakil & Sons Pvt. Ltd., Hague Building, 2nd Floor, 9 Sprott Road, Ballard Estate, Mumbai-400 001.

Out of print

1939-40 to 1986-87

1987-88 to 1989-90

1990-91 to 1992-93

1994-95 to 1997-98

2002-03

Few copies available

1993-94 Price: Rs. 160/-

1998-99 Price: Rs. 260/-

1999-2000 Price: Rs. 280/-

2000-01 Price: Rs. 280/-

2001-02 Price: Rs. 300/-

V. G. MEHTA’S

Income-tax Ready Reckoner

1939-40 to 2002-03

I.T. NOTESGENERAL

I.T. NOTESSALARY

I.T. NOTESPROPERTY

I.T. NOTESCAPITAL GAINS

QUOTATIONSAS ON 1-4-1981

EXCLUSIONSFROM TOTAL INCOME

ADVANCE TAXNOTES, INTEREST,WITH EXAMPLES

GIST OF CIRCULARSSEARCH & SEIZURE,TDS CHART, PRES. FORMS

WEALTH-TAXRATES, NOTES,TABLE, EXAMPLE,FOR 2003-04

QUOTATIONSFOR GOLD & SILVER,BONUS SHARES LIST,GIFT-TAX

I.T. TABLESINDIVIDUALS, HUFs., etc.2004-05WITH EXAMPLES

I.T. TABLESFIRMS, CO-OP. SOCIETY,LTD. COMPANIES FOR2003-04

MONTHLYSALARY TABLESFOR F.Y. 2003-04

I.T. TABLESINDIVIDUALS & HUFs.2003-04

REBATE OF(DEDUCTION FROM)INCOME-TAX

DEDUCTIONSFROM GROSS TOTALINCOME

I.T. NOTESASST. OF FIRMS, INT.,PENALTIES, ETC.

I.T. NOTESOTHER SOURCES,RETURNS, ASSESSMENTAND LOSSES

I.T. NOTESBUSINESS& PROFESSION

FINANCEACT, 2003WITH NOTES

49

4

68

97

103

140

171

179

195

206

210

232

239

246

254

271

274

281

304

289

20

03

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20

03

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20

03

-04

20

03

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20

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TWO MINUTES PLEASE:Before

You proceed to go through this publication, may I draw your kind attention to the following:This “Income-tax Ready Reckoner” is based on the Direct Tax Laws as amended by the Finance Act, 2003.

Rates of income-tax & surcharge:In the case of individuals, HUFs, AOPs & BOIs, the exemption limit is Rs. 50,000 for assessment years

2003-04 & 2004-05 and no changes are made in the rate structure [Refer page 33 & 37].For assessment year 2004-05, surcharge at the rate of 10% (as against 5%) on income-tax is leviable

where the total (taxable) income exceeds Rs. 8,50,000 (as against Rs. 60,000) in the case of resident/non-resident assessees being individuals, HUFs, AOPs & BOIs. In the case of firms, co-operative societies,companies & local authorities, surcharge @ 2.5% (as against @ 5%) is leviable [Refer item (iii) on page 41].

The rates at which income-tax is required to be deducted at source during the financial year 2003-04from income by way of interest on securities, winnings from lotteries, etc. are specified in Part II of the FirstSchedule to the Finance Act, 2003 subject to certain exceptions [Refer item (ii) on page 39]. The amount ofincome-tax deducted/collected during the financial year 2003-04, is to be increased by surcharge at the rateprescribed (as against 5%), on the amount of income-tax so deducted/collected [Refer paras (a), (b) & (c) ofitem (ii) on page 39].

INCOME-TAX(i) In relation to assessment year 2004-05:

(1) Exemption restored in respect of income by way of dividends from domestic company and incomefrom units of Mutual Fund/Administrator/specified company. Maturity value of specified life insurance policyissued on or after 1-4-2003, not eligible for exemption [Refer Para 1.11/6.1, 6.2 & 1.2A on page 43/48, 341 &42, respectively].

(2) Assessing Officer empowered to allow inter-trust donations where a trust is dissolved, fromassessment year 2003-04 & onwards [Refer Para 2.1 on page 45].

(3) Conditions for determining status of ‘‘resident but not ordinarily resident’’, modified [Refer Para11.1 on page 348].

(4) Amount received/receivable in instalments by an employee on voluntary retirement is also exempt[Refer Para 1.2 on page 41]. Standard deduction u/s. 16(i) increased & employee having salary incomeexceeding Rs. 5,00,000 also entitled to a deduction of Rs. 20,000 [Refer Para 3.2 on page 45].

(5) Provisions relating reserve for shipping business, modified [Refer Para 4.2A on page 45]. Intereston borrowed capital for acquisition of an asset in certain cases not allowable as expenditure [Refer Para 4.3on page 46]. Provisions for disallowance of interest, salary, etc., paid to non-residents, if no tax deducted,amended [Refer Para 4.5 on page 46]. Definition of term ‘Plant’ not to include buildings, furniture andfittings also [Refer Para 4.6(A) on page 47]. Provisions relating to disallowance of unpaid statutory liability,modified [Refer Para 4.7 on page 47].

(6) Long-term capital gain on sale of eligible equity shares purchased during the period from1-3-2003 to 28-2-2004, to be excluded from total income [Refer Para 1.11 on page 44]. Capital gains/capital loss on sale of unit of Unit Scheme, 1964, to be excluded from total income, from assessment year2003-04 & onwards [Refer Para 1.10 on page 43].

(7) Deduction in respect of: (a) maintenance/medical treatment of handicapped dependantu/s. 80DD, substituted [Refer Para 8.1 on page 341]; (b) medical treatment, etc. u/s. 80DDB, substituted[Refer Para 8.2 on page 342]; (c) export turnover u/s. 80HHC, amended [Refer Para 8.2B on page 343]; (d)specified undertakings/enterprises u/s. 80-IA/80-IB, amended [Refer Para 8.3/8.4 on page 343]; (e) certainundertakings/enterprises in certain special category States u/s. 80-IC, subject to conditions [Refer Para 8.5 onpage 343]; (f) interest on securities, etc. u/s. 80L(1) increased from Rs. 9,000 to Rs. 12,000, from assessmentyear 2003-04 and onwards [Refer Para 8.6 on page 344]; (g) inter-corporate dividends u/s. 80M omittedconsequent to said dividends being exempt u/s. 10(34) [Refer Para 8.7 on page 344]; (h) royalty income, etc.of authors of certain books entitled u/s. 80QQB to deduction not exceeding Rs. 3,00,000, subject to conditions[Refer Para 8.8 on page 344]; (i) royalty on patents received by a patentee entitled u/s. 80RRB to deductionnot exceeding Rs. 3,00,000, subject to conditions [Refer Para 8.9 on page 345]; and (j) permanent disabilityu/s. 80U, substituted [Refer Para 8.10 on page 345].

(8) Specififed savings u/s. 88(2) to include tuition fees paid for education of children for purpose ofrebate of (deduction from) income-tax u/s. 88 [Refer Para 9.1(A) on page 345]. Rebate u/s. 88 not allowable inrespect of certain insurance policy [Refer Para 9.1(B) on page 346]. Tax rebate u/s. 88B to senior citizensincreased from Rs. 15,000 to Rs. 20,000 [Refer Para 9.2 on page 346].

(9) Provisions relating to assessment of firms/partners u/s. 184(5)/185, amended [Refer Para 10.3 onpage 346].

[Concluded on page 349]

Note: The finance ministry has announced that the last date for filing annual return has been extended to 30th September, 2003, in respect oftax deducted in 2002-03 (i.e., annual returns for tax deducted at source during the financial year 2002-03 which were due on30-4-2003, 30-5-2003 & 30-6-2003 has been extended to 30-9-2003) [Source: Economic Times, Mumbai Edition, dt. 29-4-2003].

f-Two Minutes.pmd 07/27/2009, 11:50 AM2

V. G. MEHTA'STM

INCOME-TAX READY RECKONERASSESSMENT YEAR

2003-042003-042003-042003-042003-04

WITH

RATES TABLES AND EXAMPLES FOR:

(1) CAPITAL GAINS (2) WEALTH-TAX

(3) GIFT-TAX (4) COMPANIES

(5) GIST OF IMPORTANT CIRCULARS ON DIRECT TAXES

(6) LIST OF BONUS SHARES

ALSO

ASSESSMENT YEAR

2004-05

FOR DEDUCTION OF TAX FROM “SALARIES”

&

COMPUTATION OF “ADVANCE TAX”

during the Financial year 2003-04

By

N. V. MEHTACHARTERED ACCOUNTANT

PUBLISHERS:

SHRI KUBER PUBLISHING HOUSECOURT HOUSE, DHOBI TALAO,

MUMBAI 400 002.

TEL.: 2201 5532 • FAX: 2207 6082• E-mail: skph@vsnl.net

PRICE: Rs. 360

with

PLASTIC JACKET©

Page

Finance Act, 2003 . . 4Salient features of the Finance Act, 2003 39

Short notes on Income-tax Act, 1961:I. Definitions:

(a) Assessment & assessment year . . 49(b) Previous year & assessee . . 49(c) Resident, non-resident, etc. . . 50(d) Non-resident Indian residing outside

India . . 53Deemed income with examples . . 57Partial partition of HUF . . 60Private discretionary trusts & Oral trusts 60

II. Charitable and religious trusts:Extent and conditions for exemptions . . 62

III. Salaries:(a) Income assessable under the head

“Salaries” . . 68(b) Exempt allowances u/s. 10(14) . . 69(c) Gratuities received:

(1) by Government employees . . 71(2) under the Payment of Gratuity

Act, 1972 . . 72(3) by employees of private sector . . 72

(d) Relief u/s. 89 in respect of salaryreceived in arrears, etc. . . 73

(e) Voluntary retirement . . 75(f) Approved superannuation fund . . 76(g) Encashment of earned leave . . 76(h) Perquisites:

(1) Rent-free quarters . . 79(2) Concessional rent . . 79(3) In respect of use of motor car . . 81(4) In respect of gardener, gas, etc. . . 83(5) Other fringe benefits or

amenities . . 84(6) Tax paid by employer on

non-monetary perquisites . . 87(7) Medical expenses . . 88

(i) Exempt perquisites:(1) House rent allowance . . 89(2) Conveyance and travelling . . 90(3) Leave travel concession . . 91

(j) Profits in lieu of salary . . 92(k) Salaries of foreign technicians . . 92(l) Deductions from “Salaries” . . 93(m) Deduction of tax @ source from

“Salaries” . . 94

IV. House property:(a) Annual value . . 97(b) Self-occupied property . . 99(c) Deductions from property income . . 101

V. Profits and gains of business or profession:(a) Deemed income . . 103(b) Depreciation . . 105(c) Rates of depreciation for:

(1) assessment year 2003-04 &onwards . . 109

(2) assessment years 2000-01 to2002-03 . . 137

(d) Unabsorbed depreciation . . 113(e) Reserves for shipping business . . 117

I N D E X

Page

(f ) Expenditure on scientific research . . 117(g) Bonus, commission, bad debts,

travelling expenditure, etc. . . 122(h) Provisions relating to demerger of

companies . . 125(i) Amounts not deductible . . 127(j) Special provisions for computing

profits from business in certain cases 130(k) Maintenance of books of account . . 134(l) Method of accounting . . 135(m) Compulsory audit . . 135

VI. Capital gains:(a) Definitions . . 140(b) Charge of capital gain . . 142(c) Transactions not regarded as transfer 144(d) Mode of computation and deductions 146(e) Notification on Cost Inflation Index 146(f ) On depreciable assets . . 150(g) Exemptions . . 153(h) Tax on long-term capital gains . . 163(i) Equity shares quotations as on

1-4-1981 . . 171

VII. Income from other sources:(a) Dividends . . 179(b) Winnings from lotteries, races, etc. . . 180(c) Interest on securities . . 180(d) Unexplained cash credits, etc. . . 182(e) Mode of taking loans & deposits . . 183(f ) Permanent account number . . 183

VIII. Returns:(a) Voluntary return . . 185(b) Loss return, belated return,

revised return and defective return . . 187

IX. Kinds of assessment:(a) Self-assessment . . 189(b) Acceptance of return . . 189(c ) Regular and best judgment assessment 189(d) Time limit for completion of

assessment . . 191(e) Rectification of mistake . . 191

X. Miscellaneous:(a) Set off and carry forward of losses . . 192(b) Speculation loss . . 193(c ) Loss under head “Capital gains” . . 194(d) Assessment of firms and its partners 195(e) Interest payable for defaults . . 197(f ) Interest receivable . . 200(g) Interest chart . . 201(h) Penalty chart . . 203(i ) Waiver of penalty . . 205

Exclusions from total income:Summary of incomes which are whollyexempt from income-tax . . 206

Deductions from gross total income:Deductions in details with limits,conditions and examples . . 210

Deductions from income-tax:(a) In respect of L.I.P., etc. u/s. 88 . . 232(b) Additional rebate u/s. 88B/88C . . 233

I N D E X — Contd.ASSESSMENT YEARS 2003-04 & 2004-05

Financial year ending on 31-3-2003.Accounting periods:

Financial year ending on 31-3-2004.

Page

Income-tax & surcharge tables:

ASSESSMENT YEAR 2003-04

(i) Individuals, HUFs. (specified/non-specified),AOPs., non-residents, etc.:

Taxable income:(1) Between Rs. 50,000 & Rs. 60,000 239(2) Between Rs. 60,000 & Rs. 1,00,000 240-241(3) Between Rs. 1,00,000 & Rs. 1,50,000 242-243(4) Between Rs. 1,50,000 & Rs. 10,00,000 244-245

Examples for deductions, etc. . . 289-294

(ii) Firms:

Examples . . 246

Taxable income:Between Rs. 10 & Rs. 10,00,000 . . 247

(iii) Co-operative societies:Deductions, example & table . . 248-249

(iv) Companies:(1) Table for income-tax & surcharge

for assessment year 2003-04 . . 250(2) Examples and computation of

income-tax/wealth-tax for domesticcompanies . . 251-253

Wealth-tax(1) Rates of wealth-tax for assessment years

2000-01 to 2003-04 . . 254(2) Exemptions for assessment years 2000-01

to 2003-04 . . 255(3) Short notes on Wealth-tax Act with

explanatory notes and penalties leviable . . 256-267(4) Exempted assets explained with example 268-269(5) Wealth-tax table for assessment year

2003-04 . . 270(6) Example for company . . 253(7) Market rates of gold and silver from

27-10-1981 to 31-3-2003 . . 271(8) List of bonus shares . . 272

Gift-tax

Rate of gift-tax [upto 30-9-98] . . 272

ASSESSMENT YEAR 2004-05Monthly Salary:

For deduction of tax during the financial year 2003-04:Deduction of tax @ source and example . . 274

Monthly salary tables:From Rs. 4,167 to Rs. 15,400 per monthsalary . . 275-279

Advance tax

Main features of payment of advance tax inrespect of assessment year 1997-98 and onwards 281-288

Income-tax & surcharge tables:Advance tax:

(i) Individuals, HUFs. (specified/non-specified),AOPs., non-residents, etc.:

Examples for deductions, aggregationof agricultural income, etc., etc. forassessment years 2003-04 & 2004-05 . . 289-294

Taxable income:

(1) Between Rs. 50,000 & Rs. 60,000 295

(2) Between Rs. 60,000 & Rs. 1,50,000 296-297

(3) Between Rs. 1,50,000 & Rs. 8,50,000 298-299

(4) Between Rs. 8,50,000 & Rs.10,00,000 300-301

(ii) Firms:Taxable income:

Between Rs. 10 & Rs. 10,00,000 . . 302

(iii) Co-operative societiesTaxable income:

Between Rs. 10 & Rs. 4,00,000 . . 273

(iv) Companies:

Table for income-tax & surcharge forassessment year 2004-05 . . 303

Tax Savings Plan . . 280

Important Circulars

(1) On Finance Acts, etc. . . 304(2) On deduction of tax @ source/collection

of tax @ source . . 305-311(3) On Income-tax . . 312-328(4) On Wealth-tax & Gift-tax . . 328-329

Search and Seizure under Income-tax Act . . 330-334

TDS ChartChart for deduction of tax @ source duringfinancial year 2003-04/Collection of tax @source . . 335-337

Prescribed FormsImportant Prescribed Forms under theIncome-tax Rules, 1962 . . 338-340

Typical stepsFrom Rs. 50,000 to Rs. 10,00,000 taxable

income for the assessment years2003-04 & 2004-05 . . 350-351

ObligationsStatutory compliances on various dates

under the Direct Tax Laws . . 352

{Page

FINANCE ACT2003

4

THE FINANCE ACT, 2003AN ACT

to give effect to the financial proposals of the Central Government for the financial year 2003-2004.

BE it enacted by Parliament in the Fifty-fourth Year of the Republic of India as follows:—

CHAPTER I : PRELIMINARY1. Short title and commencement. (1) This Act may be called the Finance Act, 2003.

(2) Save as otherwise provided in this Act, sections 2 to 103 [except clause (b) of section 92] shallbe deemed to have come into force on the 1st day of April, 2003.

CHAPTER II : RATES OF INCOME-TAX2. Income-tax. (1) Subject to the provisions of sub-sections (2) and (3), for the assessment year

commencing on the 1st day of April, 2003, income-tax shall be charged at the rates specified in Part I of theFirst Schedule and such tax as reduced by the rebate of income-tax calculated under Chapter VIII-A of theIncome-tax Act, 1961 (hereinafter referred to as the Income-tax Act) shall be increased by a surcharge forpurposes of the Union calculated in each case in the manner provided therein.

(2) In the cases to which Paragraph A of Part I of the First Schedule applies, where the assessee has,in the previous year, any net agricultural income exceeding five thousand rupees, in addition to total income, andthe total income exceeds fifty thousand rupees, then,–

(a) the net agricultural income shall be taken into account, in the manner provided in clause (b)[that is to say, as if the net agricultural income were comprised in the total income after the first fiftythousand rupees of the total income but without being liable to tax], only for the purpose of chargingincome-tax in respect of the total income; and

(b) the income-tax chargeable shall be calculated as follows:–(i) the total income and the net agricultural income shall be aggregated and the amount of

income-tax shall be determined in respect of the aggregate income at the rates specified in thesaid Paragraph A, as if such aggregate income were the total income;

(ii) the net agricultural income shall be increased by a sum of fifty thousand rupees, and theamount of income-tax shall be determined in respect of the net agricultural income as soincreased at the rates specified in the said Paragraph A, as if the net agricultural income as soincreased were the total income;

(iii) the amount of income-tax determined in accordance with sub-clause (i) shall be reducedby the amount of income-tax determined in accordance with sub-clause (ii) and the sum so arrivedat shall be the income-tax in respect of the total income:

Provided that the amount of income-tax so arrived at, as reduced by the amount of rebate ofincome-tax calculated under Chapter VIII-A, shall be increased by a surcharge for purposes of the Unioncalculated in each case in the manner provided in that Paragraph and the sum so arrived at shall be the income-taxin respect of the total income.

(3) In cases to which the provisions of Chapter XII or Chapter XII-A or section 115JB or sub-section(1A) of section 161 or section 164 or section 164A or section 167B of the Income-tax Act apply, the tax chargeableshall be determined as provided in that Chapter or that section, and with reference to the rates imposed bysub-section (1) or the rates as specified in that Chapter or section, as the case may be:

Provided that the amount of income-tax computed in accordance with the provisions of section 112shall be increased by a surcharge for purposes of the Union as provided in Paragraph A, B, C, D or E, as the casemay be, of Part I of the First Schedule:

Provided further that the amount of income-tax computed in accordance with the provisions ofsection 113 shall be increased by a surcharge for purposes of the Union as provided in Paragraph A, B, C, D or E,as the case may be, of Part III of the First Schedule of the Finance Act of the year in which the search is initiatedunder section 132 or requisition is made under section 132A of the Income-tax Act:

Provided also that in respect of any income chargeable to tax under sections 115A, 115AB, 115AC,115ACA, 115AD, 115B, 115BB, 115BBA, 115BBB, 115E and 115JB of the Income-tax Act, the amount of income-tax computed under this sub-section shall be increased by a surcharge for purposes of the Union, calculated at therate of five per cent. of such income-tax.

(4) In cases in which tax has to be charged and paid under section 115-O or sub-section (2) of section115R of the Income-tax Act, the tax shall be charged and paid at the rate as specified in those sections and shall beincreased by a surcharge for purposes of the Union, calculated at the rate of two and one-half per cent. of such tax.

(5) In cases in which tax has to be deducted under sections 193, 194, 194A, 194B, 194BB, 194D and195 of the Income-tax Act, at the rates in force, the deductions shall be made at the rates specified in Part II of theFirst Schedule and shall be increased, by a surcharge for purposes of the Union, calculated in each case, in themanner provided therein.

5 FINANCE ACT2003

(6) In cases in which tax has to be deducted under sections 194C, 194E, 194EE, 194F, 194G, 194H,194-I, 194J, 196B, 196C and 196D of the Income-tax Act, the deductions shall be made at the rates specified inthose sections and shall be increased by a surcharge for purposes of the Union, calculated,–

(a) in the case of every individual, Hindu undivided family, association of persons and body ofindividuals, whether incorporated or not, at the rate of ten per cent. of such tax where the income orthe aggregate of such incomes paid or likely to be paid and subject to the deduction exceeds rupeeseight hundred and fifty thousand rupees;

(b) in the case of every co-operative society, firm, local authority and company, at the rate of twoand one-half per cent. of such tax;

(c) in the case of every artificial juridical person referred to in sub-clause (vii) of clause (31) ofsection 2 of the Income-tax Act, at the rate of ten per cent. of such tax.(7) In cases in which tax has to be collected under the proviso to section 194B of the Income-tax Act,

the collection shall be made at the rates specified in Part II of the First Schedule, and shall be increased, by asurcharge for purposes of the Union, calculated in the manner provided therein.

(8) In cases in which tax has to be collected under section 206C of the Income-tax Act, the collectionshall be made at the rates specified in that section and shall be increased by a surcharge for purposes of the Union,calculated,–

(a) in the case of every individual, Hindu undivided family, association of persons and body ofindividuals, whether incorporated or not, at the rate of ten per cent. of such tax where the amount orthe aggregate of such amounts collected and subject to the collection exceeds rupees eight hundredand fifty thousand rupees;

(b) in the case of every co-operative society, firm, local authority and company, at the rate of twoand one-half per cent. of such tax;

(c) in the case of every artificial juridical person referred to in sub-clause (vii) of clause (31) ofsection 2 of the Income-tax Act, at the rate of ten per cent. of such tax.(9) Subject to the provisions of sub-section (10), in cases in which income-tax has to be charged under

sub-section (4) of section 172 or sub-section (2) of section 174 or section 174A or section 175 or sub-section (2) ofsection 176 of the Income-tax Act or deducted from, or paid on, income chargeable under the head “Salaries”under section 192 of the said Act or in which the “advance tax” payable under Chapter XVII-C of the said Act hasto be computed at the rate or rates in force, such income-tax or, as the case may be, “advance tax” shall be socharged, deducted or computed at the rate or rates specified in Part III of the First Schedule and such tax asreduced by the rebate of income-tax calculated under Chapter VIII-A of the said Act shall be increased by asurcharge for purposes of the Union, calculated in each case in the manner provided therein:

Provided that in cases to which the provisions of Chapter XII or Chapter XII-A or section 115JB orsub-section (1A) of section 161 or section 164 or section 164A or section 167B of the Income-tax Act apply,“advance tax” shall be computed with reference to the rates imposed by this sub-section or the rates as specified inthat Chapter or section, as the case may be:

Provided further that the amount of “advance tax” computed in accordance with the provisions ofsection 112 of the Income-tax Act shall be increased by a surcharge for purposes of the Union as provided inParagraph A, B, C, D or E, as the case may be, of Part III of the First Schedule:

Provided also that in respect of any income chargeable to tax under sections 115A, 115AB, 115AC,115ACA, 115AD, 115B, 115BB, 115BBA, 115E and 115JB of the Income-tax Act, “advance tax” computed underthe first proviso shall be increased by a surcharge for purposes of the Union, calculated,–

(a) in the case of every individual, Hindu undivided family, association of persons and body ofindividuals, whether incorporated or not, at the rate of ten per cent. of “advance tax” where the totalincome exceeds eight hundred and fifty thousand rupees;

(b) in the case of every co-operative society, firm, local authority and company, at the rate of twoand one-half per cent. of such “advance tax”;

(c) in the case of every artificial juridical person referred to in sub-clause (vii) of clause (31) ofsection 2 of the Income-tax Act, at the rate of ten per cent. of such “advance tax”.(10) In cases to which, Paragraph A of Part III of the First Schedule applies, where the assessee has, in

the previous year or, if by virtue of any provision of the Income-tax Act, income-tax is to be charged in respect ofthe income of a period other than the previous year, in such other period, any net agricultural income exceedingfive thousand rupees, in addition to total income and the total income exceeds fifty thousand rupees, then, incharging income-tax under sub-section (2) of section 174 or section 174A or section 175 or sub-section (2) ofsection 176 of the said Act or in computing the “advance tax” payable under Chapter XVII-C of the said Act, at therate or rates in force,–

(a) the net agricultural income shall be taken into account, in the manner provided in clause (b) [thatis to say, as if the net agricultural income were comprised in the total income after the first fifty thousandrupees of the total income but without being liable to tax], only for the purpose of charging or computingsuch income-tax or, as the case may be, “advance tax” in respect of the total income; and

(b) such income-tax or, as the case may be, “advance tax” shall be so charged or computed as follows:–(i) the total income and the net agricultural income shall be aggregated and the amount of

income-tax or “advance tax” shall be determined in respect of the aggregate income at the ratesspecified in the said Paragraph A, as if such aggregate income were the total income;

FINANCE ACT2003

6

(ii) the net agricultural income shall be increased by a sum of fifty thousand rupees, and theamount of income-tax or “advance tax” shall be determined in respect of the net agricultural incomeas so increased at the rates specified in the said Paragraph A, as if the net agricultural income were thetotal income;

(iii) the amount of income-tax or “advance tax” determined in accordance with sub-clause (i) shallbe reduced by the amount of income-tax or, as the case may be, “advance tax” determined inaccordance with sub-clause (ii) and the sum so arrived at shall be the income-tax or, as the case may be,“advance tax” in respect of the total income:

Provided that the amount of income-tax or “advance tax” so arrived at, as reduced by the rebate ofincome-tax calculated under Chapter VIII-A of the said Act, shall be increased by a surcharge for purposes of theUnion calculated in each case, in the manner provided therein.

(11) For the purposes of this section and the First Schedule,–(a) “domestic company” means an Indian company or any other company which, in respect of its

income liable to income-tax under the Income-tax Act for the assessment year commencing on the 1stday of April, 2003, has made the prescribed arrangements for the declaration and payment withinIndia of the dividends (including dividends on preference shares) payable out of such income;

(b) “insurance commission” means any remuneration or reward, whether by way of commissionor otherwise, for soliciting or procuring insurance business (including business relating to thecontinuance, renewal or revival of policies of insurance);

(c) “net agricultural income”, in relation to a person, means the total amount of agriculturalincome, from whatever source derived, of that person computed in accordance with the rulescontained in Part IV of the First Schedule;

(d) all other words and expressions used in this section and the First Schedule but not defined inthis sub-section and defined in the Income-tax Act shall have the meanings respectively assigned tothem in that Act.

CHAPTER III : DIRECT TAXESINCOME-TAX

3. Amendment of section 2. In section 2 of the Income-tax Act,—(a) in clause (24), in sub-clause (xii), for the word, brackets and figures “clause (vii)”, the word,

brackets, figure and letter “clause (va)” shall be substituted;(b) in clause (42A), in Explanation 1, in clause (i), after sub-clause (g), the following sub-clauses shall be

inserted with effect from the 1st day of April, 2004, namely:–“(h) in the case of a capital asset, being trading or clearing rights of a recognised stock exchange

in India acquired by a person pursuant to demutualisation or corporatisation of the recognised stockexchange in India as referred to in clause (xiii) of section 47, there shall be included the period forwhich the person was a member of the recognised stock exchange in India immediately prior to suchdemutualisation or corporatisation;

(ha) in the case of a capital asset, being equity share or shares in a company allotted pursuant todemutualisation or corporatisation of a recognised stock exchange in India as referred to in clause(xiii) of section 47, there shall be included the period for which the person was a member of therecognised stock exchange in India immediately prior to such demutualisation or corporatisation;”.

4. Amendment of section 6. In section 6 of the Income-tax Act, for clause (6), the following clause shallbe substituted with effect from the 1st day of April, 2004, namely:–

‘(6) A person is said to be “not ordinarily resident” in India in any previous year if such person is–(a) an individual who has been a non-resident in India in nine out of the ten previous years

preceding that year, or has during the seven previous years preceding that year been in India for aperiod of, or periods amounting in all to, seven hundred and twenty-nine days or less; or

(b) a Hindu undivided family whose manager has been a non-resident in India in nine out of theten previous years preceding that year, or has during the seven previous years preceding that yearbeen in India for a period of, or periods amounting in all to, seven hundred and twenty-nine days orless.’.

5. Amendment of section 9. In section 9 of the Income-tax Act, in sub-section (1), in clause (i), theexisting Explanation shall be numbered as Explanation 1 thereof and after Explanation 1 as so numbered, thefollowing Explanations shall be inserted with effect from the 1st day of April, 2004, namely:–

‘Explanation 2.–For the removal of doubts, it is hereby declared that “business connection” shallinclude any business activity carried out through a person who, acting on behalf of the non-resident,–

(a) has and habitually exercises in India, an authority to conclude contracts on behalf of thenon-resident, unless his activities are limited to the purchase of goods or merchandise for thenon-resident; or

(b) has no such authority, but habitually maintains in India a stock of goods or merchandise fromwhich he regularly delivers goods or merchandise on behalf of the non-resident; or

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(c) habitually secures orders in India, mainly or wholly for the non-resident or for thatnon-resident and other non-residents controlling, controlled by, or subject to the same commoncontrol, as that non-resident:Provided that such business connection shall not include any business activity carried out through a

broker, general commission agent or any other agent having an independent status, if such broker, generalcommission agent or any other agent having an independent status is acting in the ordinary course of hisbusiness:

Provided further that where such broker, general commission agent or any other agent works mainlyor wholly on behalf of a non-resident (hereafter in this proviso referred to as the principal non-resident) oron behalf of such non-resident and other non-residents which are controlled by the principal non-residentor have a controlling interest in the principle non-resident or are subject to the same common control asthe principal non-resident, he shall not be deemed to be a broker, general commission agent or an agent ofan independent status.

Explanation 3.— Where a business is carried on in India through a person referred to in clause (a) orclause (b) or clause (c) of Explanation 2, only so much of income as is attributable to the operations carriedout in India shall be deemed to accrue or arise in India.’.6. Amendment of section 10. In section 10 of the Income-tax Act,–

(a) in clause (6C), for the words “by way of fees”, the words “by way of royalty or fees” shall besubstituted with effect from the 1st day of April, 2004;

(b) in clause (10C), with effect from the 1st day of April, 2004,–(i) in the opening portion, for the words “any amount received by an employee of”, the words

“any amount received or receivable by an employee of” shall be substituted;(ii) for the words “at the time of his voluntary retirement”, the words “on his voluntary

retirement” shall be substituted;(c) for clause (10D), the following shall be substituted with effect from the 1st day of April, 2004,

namely:–‘(10D) any sum received under a life insurance policy, including the sum allocated by way of bonus

on such policy, other than–(a) any sum received under sub-section (3) of section 80DD or sub-section (3) of section

80DDA; or(b) any sum received under a Keyman insurance policy; or(c) any sum received under an insurance policy issued on or after the 1st day of April, 2003 in

respect of which the premium payable for any of the years during the term of the policy exceedstwenty per cent. of the actual capital sum assured:Provided that the provisions of this sub-clause shall not apply to any sum received on the death of

a person:Provided further that for the purpose of calculating the actual capital sum assured under this

sub-clause, effect shall be given to the Explanation to sub-section (2A) of section 88.Explanation.–For the purposes of this clause, “Keyman insurance policy” means a life insurance

policy taken by a person on the life of another person who is or was the employee of thefirst-mentioned person or is or was connected in any manner whatsoever with the business of thefirst-mentioned person;’;(d) in clause (15), in sub-clause (iv), in item (g), for the words “a loan agreement approved by

the Central Government”, the words, figures and letters “a loan agreement approved by theCentral Government before the 1st day of June, 2003" shall be substituted with effect from the 1st day ofApril, 2004;

(e) in clause (23BBD), for the words, figures and letters “three previous years relevant to theassessment years beginning on the 1st day of April, 2001 and ending on the 31st day of March, 2004", thewords, figures and letters “seven previous years relevant to the assessment years beginning on the 1st dayof April, 2001 and ending on the 31st day of March, 2008" shall be substituted with effect from the 1st dayof April, 2004;

(f) in clause (23C), in the ninth proviso, for the figures ‘‘2003’’, the figures ‘‘2004’’ shall besubstituted and shall be deemed to have been substituted with effect from the 3rd day of February, 2001;

(g) in clause (23D), in the opening portion, for the words “any income of”, the words, figures andletter “subject to the provisions of Chapter XII-E, any income of” shall be substituted with effect from the1st day of April, 2004;

(h) in clause (23EB), for the words “Credit Guarantee Fund Trust for Small Scale Industries”, thewords “Credit Guarantee Fund Trust for Small Industries” shall be substituted and shall be deemed to havebeen substituted with effect from the 1st day of April, 2002;

(i) in clause (23FA), for the word “dividends”, the words, figures and letter “dividends,other than dividends referred to in section 115-O” shall be substituted with effect from the 1st day ofApril, 2004;

(j) in clause (23G),–(i) for the word “dividends”, the words, figures and letter “dividends, other than dividends

referred to in section 115-O” shall be substituted with effect from the 1st day of April, 2004;

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(ii) after the words, brackets, figures and letters “housing project referred to insub-section (10) of section 80-IB”, the words “or a hotel project or a hospital project” shall be insertedwith effect from the 1st day of April, 2004;

(iii) in Explanation 1,–(A) in clause (a), for the portion beginning with the words “in the business of” and ending

with the words “any infrastructure facility”, the words “in the business referred to in this clause”shall be substituted and shall be deemed to have been substituted with effect from the 1st day ofApril, 2002;

(B) in clause (b), for the portion beginning with the words “in the business of” and endingwith the words “any infrastructure facility”, the words “in the business referred to in this clause”shall be substituted and shall be deemed to have been substituted with effect from the 1st day ofApril, 2002;

(C) after clause (f), the following clauses shall be inserted with effect from the 1st day of April,2004, namely:–

‘(g) “hotel project” means a project for constructing a hotel of not less thanthree-star category as classified by the Central Government;

(h) “hospital project” means a project for constructing a hospital with at least onehundred beds for patients.’;

(k) after clause (26BB), the following shall be inserted with effect from the 1st day of April, 2004,namely:–

‘(26BBB) any income of a corporation established by a Central, State or Provincial Act for thewelfare and economic upliftment of ex-servicemen being the citizens of India.

Explanation.–For the purposes of this clause, “ex-serviceman” means a person who has served inany rank, whether as combatant or non-combatant, in the armed forces of the Union or armed forcesof the Indian States before the commencement of the Constitution (but excluding the Assam Rifles,Defence Security Corps, General Reserve Engineering Force, Lok Sahayak Sena, Jammu and KashmirMilitia and Territorial Army) for a continuous period of not less than six months after attestation andhas been released, otherwise than by way of dismissal or discharge on account of misconduct orinefficiency, and in the case of a deceased or incapacitated ex-serviceman includes his wife, children,father, mother, minor brother, widowed daughter and widowed sister, wholly dependant upon suchex-serviceman immediately before his death or incapacitation;’;(l) after clause (32), the following clause shall be inserted, namely:–

“(33) any income arising from the transfer of a capital asset, being a unit of the Unit Scheme, 1964referred to in Schedule I to the Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002and where the transfer of such asset takes place on or after the 1st day of April, 2002;”;(m) after clause (33) as so inserted, the following clauses shall be inserted with effect from the 1st day

of April, 2004, namely:–‘(34) any income by way of dividends referred to in section 115-O;(35) any income by way of,–

(a) income received in respect of the units of a Mutual Fund specified under clause (23D); or(b) income received in respect of units from the Administrator of the specified undertaking;

or(c) income received in respect of units from the specified company:

Provided that this clause shall not apply to any income arising from transfer of units of theAdministrator of the specified undertaking or of the specified company or of a mutual fund, as thecase may be.

Explanation.–For the purposes of this clause,–(a) “Administrator” means the Administrator as referred to in clause (a) of section 2 of the

Unit Trust of India (Transfer of Undertaking and Repeal) Act, 2002;(b) “specified company” means a company as referred to in clause (h) of section 2 of the Unit

Trust of India (Transfer of Undertaking and Repeal) Act, 2002;(36) any income arising from the transfer of a long-term capital asset, being an eligible equity

share in a company purchased on or after the 1st day of March, 2003 and before the 1st day of March,2004 and held for a period of twelve months or more.

Explanation.—For the purposes of this clause, ‘‘eligible equity share’’ means,—(i) any equity share in a company being a constituent of BSE-500 Index of the Stock

Exchange, Mumbai as on the 1st day of March, 2003 and the transactions of purchase andsale of such equity share are entered into on a recognised stock exchange in India;

(ii) any equity share in a company allotted through a public issue on or after the 1st dayof March, 2003 and listed in a recognised stock exchange in India before the 1st day ofMarch, 2004 and the transaction of sale of such share is entered into on a recognised stockexchange in India.’.

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7. Amendment of section 10A. In section 10A of the Income-tax Act,–(a) for sub-section (1A), the following sub-sections shall be substituted with effect from the 1st day of April, 2004, namely:—

‘‘(1A) Notwithstanding anything contained in sub-section (1), the deduction, in computing the total income of anundertaking, which begins to manufacture or produce articles or things or computer software during the previous year relevant toany assessment year commencing on or after the 1st day of April, 2003, in any special economic zone, shall be,—

(i) hundred per cent. of profits and gains derived from the export of such articles or things or computer software fora period of five consecutive assessment years beginning with the assessment year relevant to the previous year in which theundertaking begins to manufacture or produce such articles or things or computer software, as the case may be, andthereafter, fifty per cent. of such profits and gains for further two consecutive assessment years, and thereafter;

(ii) for the next three consecutive assessment years, so much of the amount not exceeding fifty per cent. of the profitas is debited to the profit and loss account of the previous year in the respect of which the deduction is to be allowed andcredited to a reserve account (to be called ‘‘Special Economic Zone Re-investment Allowance Reserve Account’’) to be createdand utilised for the purposes of the business of the assessee in the manner laid down in sub-section (1B).(1B) The deduction under clause (ii) of sub-section (1A) shall be allowed only if the following conditions are fulfilled,

namely:—(a) the amount credited to the Special Economic Zone Re-investment Allowance Reserve Account is to be utilised—

(i) for the purposes of acquiring new machinery or plant which is first put to use before the expiry of a periodof three years next following the previous year in which the reserve was created; and

(ii) until the acquisition of new machinery or plant as aforesaid, for the purposes of the business of theundertaking other than for distribution by way of dividends or profits or for remittance outside India as profits or forthe creation of any asset outside India;(b) the particulars, as may be prescribed in this behalf, have been furnished by the assessee in respect of new

machinery or plant along with the return of income for the assessment year relevant to the previous year in which such plantor machinery was first put to use,

(1C) Where any amount credited to the Special Economic Zone Re-investment Allowance Reserve Account underclause (ii) of sub-section (1A),—

(a) has been utilised for any purpose other than those referred to in sub-section (1B), the amount so utilised; or(b) has not been utilised before the expiry of the period specified in sub-clause (i) of clause (a) of

sub-section (1B), the amount not so utilised,shall be deemed to be the profits,—

(i) in a case referred to in clause (a), in the year in which the amount was so utilised; or(ii) in a case referred to in clause (b), in the year immediately following the period of three years specified in

sub-clause (i) of clause (a) of sub-section (1B),and shall be charged to tax accordingly.’’;

(b) in sub-section (4), for the word, brackets and figure ‘‘sub-section (1)’’, the words, brackets, figures and letter ‘‘sub-sections (1)and (1A)’’ shall be substituted;

(c) in sub-section (5), for the word, brackets and figure ‘‘sub-section (1)’’, the words ‘‘this section’’ shall be substituted;(d) in sub-section (6),—

(A) in clause (i), after the words ‘‘relevant assessment years’’, the words, figures and letter ‘‘ending before the 1st dayof April, 2001’’ shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2001;

(B) in clause (ii), after the words ‘‘relevant assessment years’’, the words, figures and letters ‘‘ending before the 1st dayof April, 2001’’ shall be inserted and shall be deemed to have been inserted with effect from the 1st day of April, 2001.

(e) after sub-section (7), the following sub-section shall be inserted with effect from the 1st day of April, 2004, namely:–“(7A) Where any undertaking of an Indian company which is entitled to the deduction under this section is transferred,

before the expiry of the period specified in this section, to another Indian company in a scheme of amalgamation ordemerger–

(a) no deduction shall be admissible under this section to the amalgamating or the demerged company for theprevious year in which the amalgamation or the demerger takes place; and

(b) the provisions of this section shall, as far as may be, apply to the amalgamated or the resulting company as theywould have applied to the amalgamating or the demerged company if the amalgamation or demerger had not taken place.”;

(f) sub-sections (9) and (9A) shall be omitted with effect from the 1st day of April, 2004;(g) Explanation 1 shall be omitted with effect from the 1st day of April, 2004;(h) after Explanation 3, the following Explanation shall be inserted at the end with effect from the 1st day of April, 2004, namely:–

‘Explanation 4.–For the purposes of this section, “manufacture or produce” shall include the cutting and polishing of preciousand semi-precious stones.’.

8. Amendment of section 10B. In section 10B of the Income-tax Act,–(a) in sub-section (6) with effect from the 1st day of April, 2001,–

(A) in clause (i), after the words ‘‘relevant assessment years’’, the words, figures and letters ‘‘ending before the 1st day ofApril, 2001’’ shall be inserted and shall be deemed to have been inserted;

(B) in clause (ii), after the words ‘‘relevant assessment years’’, the words, figures and letter ‘‘ending before the 1st day ofApril, 2001’’ shall be inserted and shall be deemed to have been inserted;(b) after sub-section (7), the following sub-section shall be inserted with effect from the 1st day of April, 2004, namely:—

‘‘(7A) Where any undertaking of an Indian company which is entitled to the deduction under this section is transferred,before the expiry of the period specified in this section, to another Indian company in a scheme of amalgamation or demerger–

(a) no deduction shall be admissible under this section to the amalgamating or the demerged company for theprevious year in which the amalgamation or the demerger takes place; and

(b) the provisions of this section shall, as far as may be, apply to the amalgamated or the resulting company as theywould have applied to the amalgamating or the demerged company if the amalgamation or demerger had not taken place.”;

(c) sub-sections (9) and (9A) shall be omitted with effect from the 1st day of April, 2004;

(d) Explanation 1 shall be omitted with effect from the 1st day of April, 2004;

(e) after Explanation 3, the following Explanation shall be inserted at the end, with effect from the 1st day of April, 2004, namely:–

‘Explanation 4.–For the purposes of this section, “manufacture or produce” shall include the cutting and polishing of preciousand semi-precious stones.’.

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9. Amendment of section 10C. In section 10C of the Income-tax Act, after sub-section (6) and beforethe Explanation, the following proviso shall be inserted with effect from the 1st day of April, 2004, namely:–

“Provided that no deduction under this section shall be allowed to any undertaking for the assessmentyear beginning on the 1st day of April, 2004 and subsequent years.”.10. Amendment of section 11. In section 11 of the Income-tax Act, in sub-section (3A), after the proviso,

the following proviso shall be inserted, namely:–“Provided further that in case the trust or institution, which has invested or deposited its income in

accordance with the provisions of clause (b) of sub-section (2), is dissolved, the Assessing Officer may allowapplication of such income for the purposes referred to in clause (d) of sub-section (3) in the year in whichsuch trust or institution was dissolved.”.11. Amendment of section 12. In section 12 of the Income-tax Act, in sub-section (3), for the figures

“2003”, the figures “2004”, shall be substituted and shall be deemed to have been substituted with effect from the3rd day of February, 2001.

12. Amendment of section 13A. In section 13A of the Income-tax Act, after the words “Income fromother sources or” the words “Capital gains or” shall be inserted and shall be deemed to have been inserted witheffect from the 1st day of April, 1979.

13. Amendment of section 16. In section 16 of the Income-tax Act, for clause (i), the following clauseshall be substituted with effect from the 1st day of April, 2004, namely:–

“(i) in the case of an assessee whose income from salary, before allowing a deduction under thisclause,–

(A) does not exceed five lakh rupees, a deduction of a sum equal to forty per cent. of the salary orthirty thousand rupees, whichever is less;

(B) exceeds five lakh rupees, a deduction of a sum of twenty thousand rupees;”.14. Amendment of section 30. In section 30 of the Income-tax Act, after clause (c), the following

Explanation shall be inserted with effect from the 1st day of April, 2004, namely:–“Explanation.–For the removal of doubts, it is hereby declared that the amount paid on account of the

cost of repairs referred to in sub-clause (i), and the amount paid on account of current repairs referred toin sub-clause (ii), of clause (a), shall not include any expenditure in the nature of capital expenditure.”.15. Amendment of section 31. In section 31 of the Income-tax Act, after clause (ii), the following

Explanation shall be inserted with effect from the 1st day of April, 2004, namely:–“Explanation.–For the removal of doubts, it is hereby declared that the amount paid on account of

current repairs shall not include any expenditure in the nature of capital expenditure.”.16. Amendment of section 33AB. In section 33AB of the Income-tax Act, with effect from the 1st day of

April, 2004,–(a) in the marginal heading, after the word “account”, the words “,coffee development account and

rubber development account” shall be inserted;(b) for the words “Tea Deposit Account”, wherever they occur, the words “Deposit Account” shall be

substituted;(c) in sub-section (1),–

(i) in the opening portion,–(A) for the words “growing and manufacturing tea”, the words “growing and manufacturing

tea or coffee or rubber” shall be substituted;(B) for the words “furnishing the return of his income”, the words “the due date of furnishing

the return of his income” shall be substituted;(ii) in clause (a), for the words “approved in this behalf by the Tea Board”, the words “approved

in this behalf by the Tea Board or the Coffee Board or the Rubber Board” shall be substituted;(iii) in clause (b), for the portion beginning with the words “deposited any amount” and ending

with the words “approval of the Central Government,”, the following shall be substituted, namely:–“deposited any amount in an account (hereafter in this section referred to as the DepositAccount) opened by the assessee in accordance with, and for the purposes specified in, ascheme framed by the Tea Board or the Coffee Board or the Rubber Board’’, as the case maybe (hereafter in this section referred to as the deposit scheme), with the previous approval ofthe Central Government,”;

(d) for sub-section (4) the following sub-section shall be substituted, namely:—(4) Notwithstanding anything contained in sub-section (3) where any amount standing to the

credit of the assessee in the special account or in the Deposit Account is released during any previousyear by the National Bank or withdrawn by the assessee from the Deposit Account and such amount isutilised for the purchase of –

(a) any machinery or plant to be installed in any office premises or residentialaccommodation, including any accommodation in the nature of a guest-house;

(b) any office appliances (not being computers);(c) any machinery or plant, the whole of the actual cost of which is allowed as a deduction

(whether by way of depreciation or otherwise) in computing the income chargeable under thehead “Profits and gains of business or profession” of any one previous year;

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(d) any new machinery or plant to be installed in an industrial undertaking for the purposesof business of construction, manufacture or production of any article or thing specified in the listin the Eleventh Schedule,

the whole of such amount so utilised shall be deemed to be the profits and gains of business of thatprevious year and shall accordingly be chargeable to income-tax as the income of that previous year.’;(e) in the Explanation occurring at the end, for clause (a), the following clauses shall be substituted,

namely:–‘(a) “Coffee Board” means the Coffee Board constituted under section 4 of the Coffee Act, 1942;(aa) “National Bank” means the National Bank for Agriculture and Rural Development

established under section 3 of the National Bank for Agriculture and Rural Development Act, 1981;(ab) ‘‘Rubber Board’’ means the Rubber Board constituted under sub-section (1) of section 4 of

the Rubber Board Act, 1947;’.17. Amendment of section 33AC. In section 33AC of the Income-tax Act, with effect from the 1st day of

April, 2004,–(a) in sub-section (3), in clause (c), for the words “eight years”, the words “three years” shall be

substituted;(b) after sub-section (3) and before the Explanation, the following sub-section shall be inserted,

namely:–“(4) Where the ship is sold or otherwise transferred (other than in any scheme of demerger) after

the expiry of the period specified in clause (c) of sub-section (3) and the sale proceeds are not utilisedfor the purpose of acquiring a new ship within a period of one year from the end of the previous yearin which such sale or transfer took place, such sale proceeds shall be deemed to be the profits of theassessment year immediately following the previous year in which the ship is sold or transferred.”.

18. Amendment of section 36. In section 36 of the Income-tax Act, in sub-section (1),–(a) in clause (iii) and before the Explanation, the following proviso shall be inserted with effect from

the 1st day of April, 2004, namely:–“Provided that any amount of the interest paid, in respect of capital borrowed for acquisition of an

asset for extension of existing business or profession (whether capitalised in the books of account ornot); for any period beginning from the date on which the capital was borrowed for acquisition of theasset till the date on which such asset was first put to use, shall not be allowed as deduction.”;(b) in clause (viia), in sub-clause (a), after the second proviso and before the Explanation, the following

provisos shall be inserted with effect from the 1st day of April, 2004, namely:–‘Provided also that a scheduled bank or a non-scheduled bank referred to in this sub-clause shall,

at its option, be allowed a further deduction in excess of the limits specified in the foregoingprovisions, for an amount not exceeding the income derived from redemption of securities inaccordance with a scheme framed by the Central Government:

Provided also that no deduction shall be allowed under the third proviso unless such income hasbeen disclosed in the return of income under the head “Profits and gains of business or profession”.’;(c) in clause (x), for the words, brackets, figures and letter “any fund specified under clause (23E) of

section 10", the words “any Exchange Risk Administration Fund set up by public financial institutions,either jointly or separately” shall be substituted;

(d) after the Explanation below clause (xi), the following clause shall be inserted and shall be deemedto have been inserted with effect from the 1st day of April, 2002, namely:–

“(xii) any expenditure (not being in the nature of capital expenditure) incurred by a corporationor a body corporate, by whatever name called, constituted or established by a Central, State orProvincial Act for the objects and purposes authorised by the Act under which such corporation orbody corporate was constituted or established.”.

19. Amendment of section 40. In section 40 of the Income-tax Act, in clause (a), with effect from the 1stday of April, 2004,–

(a) for sub-clause (i), the following sub-clause shall be substituted, namely:–‘(i) any interest (not being interest on a loan issued for public subscription before the 1st day of

April, 1938), royalty, fees for technical services or other sum chargeable under this Act, which ispayable,–

(A) outside India; or(B) in India to a non-resident, not being a company or to a foreign company,

on which tax has not been deducted or, after deduction, has not been paid before the expiry of thetime prescribed under sub-section (1) of section 200 and in accordance with other provisions ofChapter XVII-B:Provided that where in respect of any such sum, tax has been deducted under Chapter XVII-B or paid

in any subsequent year, such sum shall be allowed as a deduction in computing the income of the previousyear in which such tax has been paid.

Explanation.–For the purposes of this sub-clause,–(A) “royalty” shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of

section 9;

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(B) “fees for technical services” shall have the same meaning as in Explanation 2 to clause (vii) ofsub-section (1) of section 9;’;(b) for sub-clause (iii), the following sub-clause shall be substituted, namely:–

‘(iii) any payment which is chargeable under the head “Salaries”, if it is payable–(A) outside India; or(B) to a non-resident,

and if the tax has not been paid thereon nor deducted therefrom under Chapter XVII-B;’.20. Amendment of section 43. In section 43 of the Income-tax Act, with effect from the 1st day of

April, 2004,–(a) in clause (3), after the words “but does not include tea bushes or livestock”, the words “or

buildings or furniture and fittings” shall be inserted;(b) in clause (6), in Explanation 2B, the words “as appearing in the books of account” shall be omitted.

21. Amendment of section 43B. In section 43B of the Income-tax Act, with effect from the 1st day ofApril, 2004,–

(a) in clause (e),–(i) for the words “term loan”, the words “loan or advances” shall be substituted;(ii) for the words “such loan”, the words “such loan or advances” shall be substituted;

(b) in the first proviso, the words, brackets and letters “referred to in clause (a) or clause (c) or clause(d) or clause (e) or clause (f)” shall be omitted;

(c) the second proviso shall be omitted.22. Amendment of section 44AA. In section 44AA of the Income-tax Act, in sub-section (2), in clause

(iii), after the word, figures and letters “section 44AF”, the words, figures and letters “or section 44BB or section44BBB” shall be inserted with effect from the 1st day of April, 2004.

23. Amendment of section 44AB. In section 44AB of the Income-tax Act, with effect from the 1st day ofApril, 2004,–

(a) in clause (c), after the word, figures and letters “section 44AF”, the words, figures and letters “orsection 44BB or section 44BBB” shall be inserted;

(b) in the first proviso, for the words, figures and letters “section 44BB or section 44BBA or section44BBB”, the word, figures and letters “section 44BBA” shall be substituted.24. Amendment of section 44AE. In section 44AE of the Income-tax Act, in sub-section (1), after the

words “who owns not more than ten goods carriages”, the words “at any time during the previous year” shall beinserted with effect from the 1st day of April, 2004.

25. Amendment of section 44BB. In section 44BB of the Income-tax Act, after sub-section (2) andbefore the Explanation, the following sub-section shall be inserted with effect from the 1st day of April, 2004,namely:–

“(3) Notwithstanding anything contained in sub-section (1), an assessee may claim lower profits andgains than the profits and gains specified in that sub-section, if he keeps and maintains such books ofaccount and other documents as required under sub-section (2) of section 44AA and gets his accountsaudited and furnishes a report of such audit as required under section 44AB, and thereupon the AssessingOfficer shall proceed to make an assessment of the total income or loss of the assessee under sub-section (3)of section 143 and determine the sum payable by, or refundable to, the assessee.”.26. Amendment of section 44BBB. In section 44BBB of the Income-tax Act, with effect from the 1st day

of April, 2004,–(a) the existing section shall be numbered as sub-section (1) thereof and in sub-section (1) as so

numbered, the words “and financed under any international aid programme” shall be omitted;(b) after sub-section (1) as so numbered, the following sub-section shall be inserted, namely:–

“(2) Notwithstanding anything contained in sub-section (1), an assessee may claim lower profitsand gains than the profits and gains specified in that sub-section, if he keeps and maintains such booksof account and other documents as required under sub-section (2) of section 44AA and gets hisaccounts audited and furnishes a report of such audit as required under section 44AB, and thereuponthe Assessing Officer shall proceed to make an assessment of the total income or loss of the assesseeunder sub-section (3) of section 143 and determine the sum payable by, or refundable to, theassessee.”.

27. Amendment of section 44D. In section 44D of the Income-tax Act, in clause (b), after the words,figures and letters “after the 31st day of March, 1976", the words, figures and letters “but before the 1st day ofApril, 2003” shall be inserted with effect from the 1st day of April, 2004.

28. Insertion of new section 44DA. After section 44D of the Income-tax Act, the following section shallbe inserted with effect from the 1st day of April, 2004, namely:–

‘44DA. Special provision for computing income by way of royalties, etc., in case of non-residents. (1) Theincome by way of royalty or fees for technical services received from Government or an Indian concern inpursuance of an agreement made by a non-resident (not being a company) or a foreign company with

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Government or the Indian concern after the 31st day of March, 2003, where such non-resident (not beinga company) or a foreign company carries on business in India through a permanent establishment situatedtherein, or performs professional services from a fixed place of profession situated therein, and the right,property or contract in respect of which the royalties or fees for technical services are paid is effectivelyconnected with such permanent establishment or fixed place of profession, as the case may be, shall becomputed under the head “Profits and gains of business or profession” in accordance with the provisionsof this Act:

Provided that no deduction shall be allowed,–(i) in respect of any expenditure or allowance which is not wholly and exclusively incurred for

the business of such permanent establishment or fixed place of profession in India; or(ii) in respect of amounts, if any, paid (otherwise than towards reimbursement of actual

expenses) by the permanent establishment to its head office or to any of its other offices.(2) Every non-resident (not being a company) or a foreign company shall keep and maintain books of

account and other documents in accordance with the provisions contained in section 44AA and get hisaccounts audited by an accountant as defined in the Explanation below sub-section (2) of section 288 andfurnish along with the return of income, the report of such audit in the prescribed form duly signed andverified by such accountant.

Explanation.–For the purposes of this section,–(a) “fees for technical services” shall have the same meaning as in Explanation 2 to clause (vii) of

sub-section (1) of section 9;(b) “royalty” shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of

section 9;(c) “permanent establishment” shall have the same meaning as in clause (iiia) of section 92F.’.

29. Amendment of section 45. In section 45 of the Income-tax Act, in sub-section (5), after clause (b) andbefore the Explanation, the following clause shall be inserted with effect from the 1st day of April, 2004, namely:–

“(c) where in the assessment for any year, the capital gain arising from the transfer of a capital asset iscomputed by taking the compensation or consideration referred to in clause (a) or, as the case may be,enhanced compensation or consideration referred to in clause (b), and subsequently such compensation orconsideration is reduced by any court, Tribunal or other authority, such assessed capital gain of that yearshall be recomputed by taking the compensation or consideration as so reduced by such court, Tribunal orother authority to be the full value of the consideration.”.30. Amendment of section 47. In section 47 of the Income-tax Act, with effect from the 1st day of April,

2004,–(a) in clause (xiii), for the word “corporatisation”, wherever it occurs, the words “demutualisation or

corporatisation” shall be substituted;(b) after clause (xiii), the following clause shall be inserted, namely:–

“(xiiia) any transfer of a capital asset being a membership right held by a member of a recognisedstock exchange in India for acquisition of shares and trading or clearing rights acquired by suchmember in that recognised stock exchange in accordance with a scheme for demutualisation orcorporatisation which is approved by the Securities and Exchange Board of India established undersection 3 of the Securities and Exchange Board of India Act, 1992;”.

31. Amendment of section 55. In section 55 of the Income-tax Act, in sub-section (2), with effect fromthe 1st day of April, 2004,–

(a) in clause (ab), for the word “corporatisation”, the words “demutualisation or corporatisation” shallbe substituted;

(b) after clause (ab), the following proviso shall be inserted, namely:–“Provided that the cost of a capital asset, being trading or clearing rights of the recognised stock

exchange acquired by a shareholder who has been allotted equity share or shares under such schemeof demutualisation or corporatisation, shall be deemed to be nil;”.

32. Amendment of section 57. In section 57 of the Income-tax Act, in clause (i), for the words “in thecase of dividends”, the words, figures and letter “in the case of dividends, other than dividends referred to insection 115-O” shall be substituted with effect from the 1st day of April, 2004.

33. Amendment of section 72A. In section 72A of the Income-tax Act, with effect from the 1st day ofApril, 2004,–

(a) for sub-sections (1) and (2), the following sub-sections shall be substituted, namely:–“(1) Where there has been an amalgamation of a company owning an industrial undertaking or a

ship or a hotel with another company or an amalgamation of a banking company referred to in clause(c) of section 5 of the Banking Regulation Act, 1949 with a specified bank, then, notwithstandinganything contained in any other provision of this Act, the accumulated loss and the unabsorbeddepreciation of the amalgamating company shall be deemed to be the loss or, as the case may be,allowance for depreciation of the amalgamated company for the previous year in which theamalgamation was effected, and other provisions of this Act relating to set off and carry forward of lossand allowance for depreciation shall apply accordingly.

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(2) Notwithstanding anything contained in sub-section (1), the accumulated loss shall not be setoff or carried forward and the unabsorbed depreciation shall not be allowed in the assessment of theamalgamated company unless–

(a) the amalgamating company–(i) has been engaged in the business, in which the accumulated loss occurred or

depreciation remains unabsorbed, for three or more years;(ii) has held continuously as on the date of the amalgamation at least three-fourths of

the book value of fixed assets held by it two years prior to the date of amalgamation;(b) the amalgamated company–

(i) holds continuously for a minimum period of five years from the date ofamalgamation at least three-fourths of the book value of fixed assets of the amalgamatingcompany acquired in a scheme of amalgamation;

(ii) continues the business of the amalgamating company for a minimum period of fiveyears from the date of amalgamation;

(iii) fulfils such other conditions as may be prescribed to ensure the revival of thebusiness of the amalgamating company or to ensure that the amalgamation is for genuinebusiness purpose.”;

(b) in sub-section (7), after clause (b), the following clause shall be inserted, namely:–‘(c) “specified bank” means the State Bank of India constituted under the State Bank of India Act,

1955 or a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 or acorresponding new bank constituted under section 3 of the Banking Companies (Acquisition andTransfer of Undertakings) Act, 1970 or under section 3 of the Banking Companies (Acquisition andTransfer of Undertakings) Act, 1980.’.

34. Substitution of new section for section 80DD. For section 80DD of the Income-tax Act, thefollowing section shall be substituted with effect from the 1st day of April, 2004, namely:–

‘80DD. Deduction in respect of maintenance including medical treatment of a dependant who is a person withdisability. (1) Where an assessee, being an individual or a Hindu undivided family, who is a resident inIndia, has, during the previous year,–

(a) incurred any expenditure for the medical treatment (including nursing), training andrehabilitation of a dependant, being a person with disability; or

(b) paid or deposited any amount under a scheme framed in this behalf by the Life InsuranceCorporation or any other insurer or the Administrator or the specified company subject to theconditions specified in sub-section (2) and approved by the Board in this behalf for the maintenance ofa dependant, being a person with disability,

the assessee shall, in accordance with and subject to the provisions of this section, be allowed a deductionof a sum of fifty thousand rupees from his gross total income in respect of the previous year:

Provided that where such dependant is a person with severe disability, the provisions of this sub-section shall have effect as if for the words “fifty thousand rupees”, the words “seventy-five thousandrupees” had been substituted.

(2) The deduction under clause (b) of sub-section (1) shall be allowed only if the following conditionsare fulfilled, namely:–

(a) the scheme referred to in clause (b) of sub-section (1) provides for payment of annuity orlump sum amount for the benefit of a dependant, being a person with disability, in the event of thedeath of the individual or the member of the Hindu undivided family in whose name subscription tothe scheme has been made;

(b) the assessee nominates either the dependant, being a person with disability, or any otherperson or a trust to receive the payment on his behalf, for the benefit of the dependant, being a personwith disability.(3) If the dependant, being a person with disability, predeceases the individual or the member of the

Hindu undivided family referred to in sub-section (2), an amount equal to the amount paid or depositedunder clause (b) of sub-section (1) shall be deemed to be the income of the assessee of the previous year inwhich such amount is received by the assessee and shall accordingly be chargeable to tax as the income ofthat previous year.

(4) The assessee, claiming a deduction under this section, shall furnish a copy of the certificate issuedby the medical authority in the prescribed form and manner, along with the return of income undersection 139, in respect of the assessment year for which the deduction is claimed:

Provided that where the condition of disability requires reassessment of its extent after a periodstipulated in the aforesaid certificate, no deduction under this section shall be allowed for any assessmentyear relating to any previous year beginning after the expiry of the previous year during which theaforesaid certificate of disability had expired, unless a new certificate is obtained from the medicalauthority in the form and manner, as may be prescribed, and a copy thereof is furnished along with thereturn of income.

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Explanation.–For the purposes of this section,–(a) “Administrator” means the Administrator as referred to in clause (a) of section 2 of the Unit

Trust of India (Transfer of Undertaking and Repeal) Act, 2002;(b) “dependant” means–

(i) in the case of an individual, the spouse, children, parents, brothers and sisters of theindividual or any of them;

(ii) in the case of a Hindu undivided family, a member of the Hindu undivided family,dependant wholly or mainly on such individual or Hindu undivided family for his support andmaintenance, and who has not claimed any deduction under section 80U in computing his totalincome for the assessment year relating to the previous year;

(c) “disability” shall have the meaning assigned to it in clause (i) of section 2 of the Persons withDisabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995;

(d) “Life Insurance Corporation” shall have the same meaning as in clause (iii) of sub-section (8)of section 88;

(e) “medical authority” means the medical authority as referred to in clause (p) of section 2 of thePersons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995;

(f) “person with disability” means a person as referred to in clause (t) of section 2 of the Personswith Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995;

(g) “person with severe disability” means a person with eighty per cent. or more of one or moredisabilities, as referred to in sub-section (4) of section 56 of the Persons with Disabilities (EqualOpportunities, Protection of Rights and Full Participation) Act, 1995;

(h) “specified company” means a company as referred to in clause (h) of section 2 of the UnitTrust of India (Transfer of Undertaking and Repeal) Act, 2002.’.

35. Substitution of new section for section 80DDB. For section 80DDB of the Income-tax Act, thefollowing section shall be substituted with effect from the 1st day of April, 2004, namely:–

‘80DDB. Deduction in respect of medical treatment, etc. Where an assessee who is resident in India has,during the previous year, actually paid any amount for the medical treatment of such disease or ailment asmay be specified in the rules made in this behalf by the Board–

(a) for himself or a dependant, in case the assessee is an individual; or(b) for any member of a Hindu undivided family, in case the assessee is a Hindu undivided

family,the assessee shall be allowed a deduction of the amount actually paid or a sum of forty thousand rupees,whichever is less, in respect of that previous year in which such amount was actually paid:

Provided that no such deduction shall be allowed unless the assessee furnishes with the return ofincome, a certificate in such form, as may be prescribed, from a neurologist, an oncologist, a urologist, ahaematologist, an immunologist or such other specialist, as may be prescribed, working in a Governmenthospital:

Provided further that the deduction under this section shall be reduced by the amount received, if any,under an insurance from an insurer, or reimbursed by an employer, for the medical treatment of theperson referred to in clause (a) or clause (b):

Provided also that where the amount actually paid is in respect of the assessee or his dependant or anymember of a Hindu undivided family of the assessee and who is a senior citizen, the provisions of thissection shall have effect as if for the words “forty thousand rupees”, the words “sixty thousand rupees” hadbeen substituted.

Explanation.–For the purposes of this section,–(i) “dependant” means–

(a) in the case of an individual, the spouse, children, parents, brothers and sisters of theindividual or any of them,

(b) in the case of a Hindu undivided family, a member of the Hindu undivided family,dependant wholly or mainly on such individual or Hindu undivided family for his support andmaintenance;(ii) “Government hospital” includes a departmental dispensary whether full-time or part-time

established and run by a Department of the Government for the medical attendance and treatment ofa class or classes of Government servants and members of their families, a hospital maintained by alocal authority and any other hospital with which arrangements have been made by the Governmentfor the treatment of Government servants;

(iii) “insurer” shall have the meaning assigned to it in clause (9) of section 2 of the InsuranceAct, 1938;

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(iv) “senior citizen” means an individual resident in India who is of the age of sixty-five years ormore at any time during the relevant previous year.’.

36. Amendment of section 80G. In section 80G of the Income-tax Act, in sub-section (5C), with effectfrom the 3rd day of February, 2001,–

(a) in clause (iii), for the figures ‘‘2003’’, the figures ‘‘2004’’ shall be substituted and shall be deemedto have been substituted;

(b) in clause (iv), for the figures “2003”, at both the places where they occur, the figures “2004” shallbe substituted and shall be deemed to have been substituted;

(c) in clause (v), for the figures “2003”, the figures “2004” shall be substituted and shall be deemed tohave been substituted.

37. Amendment of section 80HHC. In section 80HHC of the Income-tax Act, with effect from the 1stday of April, 2004,—

(a) in sub-section (4), the following proviso shall be inserted, namely:–“Provided that in the case of an undertaking referred to in sub-section (4C), the assessee shall also

furnish along with the return of income, a certificate from the undertaking in the special economiczone containing such particulars as may be prescribed, duly certified by the auditor auditing theaccounts of the undertaking in the special economic zone under the provisions of this Act or under anyother law for the time being in force.”;(b) after sub-section (4B) and before the Explanation, the following sub-section shall be inserted,

namely:—“(4C) The provisions of this section shall apply to an assessee,—

(a) for an assessment year beginning after the 31st day of March, 2004 and ending beforethe 1st day of April, 2005;

(b) who owns any undertaking which manufactures or produces goods or merchandiseanywhere in India (outside any special economic zone) and sells the same to any undertakingsituated in a special economic zone which is eligible for deduction under section 10A and suchsale shall be deemed to be export out of India for the purposes of this section.”;

(c) in the Explanation occurring at the end, after clause (d), the following clause shall beinserted, namely:—

“(e) “special economic zone” shall have the meaning assigned to it in clause (viii) of theExplanation 2 to section 10A.”.

38. Amendment of section 80-IA. In section 80-IA of the Income-tax Act,–(i) in sub-section (2), for the words “or develops or develops and operates or maintains and operates

a special economic zone”, the words “or develops a special economic zone” shall be substituted and shall bedeemed to have been substituted with effect from the 1st day of April, 2002;

(ii) in sub-section (4),–(a) in clause (ii), for the figures, letters and words “31st day of March, 2003”, the figures, letters

and words “31st day of March, 2004” shall be substituted with effect from the 1st day of April, 2004;(b) in clause (iii), for the proviso, the following proviso shall be substituted and shall be deemed

to have been substituted with effect from the 1st day of April, 2002, namely:–“Provided that in a case where an undertaking develops an industrial park on or after the 1st

day of April, 1999 or a special economic zone on or after the 1st day of April, 2001 and transfersthe operation and maintenance of such industrial park or such special economic zone, as the casemay be, to another undertaking (hereafter in this section referred to as the transfereeundertaking), the deduction under sub-section (1) shall be allowed to such transferee undertakingfor the remaining period in the ten consecutive assessment years as if the operation andmaintenance were not so transferred to the transferee undertaking;”.

39. Amendment of section 80-IB. In section 80-IB of the Income-tax Act,–

(a) in sub-section (4), after the second proviso, the following proviso shall be inserted with effect fromthe 1st day of April, 2004, namely:–

“Provided also that no deduction under this sub-section shall be allowed for the assessment yearbeginning on the 1st day of April, 2004 or any subsequent year to any undertaking or enterprisereferred to in sub-section (2) of section 80-IC.”;

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(b) in sub-section (8A), in clause (iii), for the figures, letters and words “1st day of April, 2003”, thefigures, letters and words “1st day of April, 2004” shall be substituted with effect from the 1st day of April,2004;

(c) in sub-section (10), with effect from the 1st day of April, 2002, –(i) in the opening portion, for the figures, letters and words “31st day of March, 2001”, the

figures, letters and words “31st day of March, 2005” shall be substituted and shall be deemed to havebeen substituted;

(ii) in clause (a), the words, figures and letters “and completes the same before the 31st day ofMarch, 2003” shall be omitted and shall be deemed to have been omitted;(d) in sub-section (11), for the figures, letters and words “31st day of March, 2003”, the figures, letters

and words “1st day of April, 2004” shall be substituted with effect from the 1st day of April, 2004.40. Insertion of new section 80-IC. After section 80-IB of the Income-tax Act, the following section shall be inserted with effect from

the 1st day of April, 2004, namely:–‘80-IC. Special provisions in respect of certain undertakings or enterprises in certain special category States. (1) Where the gross total

income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to insub-section (2), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income ofthe assessee, a deduction from such profits and gains, as specified in sub-section (3).

(2) This section applies to any undertaking or enterprise,–(a) which has begun or begins to manufacture or produce any article or thing, not being any article or thing specified in the

Thirteenth Schedule, or which manufactures or produces any article or thing, not being any article or thing specified in theThirteenth Schedule and undertakes substantial expansion during the period beginning–

(i) on the 23rd day of December, 2002 and ending before the 1st day of April, 2012, in any Export Processing Zoneor Integrated Infrastructure Development Centre or Industrial Growth Centre or Industrial Estate or Industrial Park orSoftware Technology Park or Industrial Area or Theme Park, as notified by the Board in accordance with the scheme framedand notified by the Central Government in this regard, in the State of Sikkim; or

(ii) on the 7th day of January, 2003 and ending before the 1st day of April, 2012, in any Export Processing Zone orIntegrated Infrastructure Development Centre or Industri